Download and install QEMU for Windows from http://www.h7.dion.ne.jp/~qemu-win/
(qemu-0.7.2-tap.zip and qemu-0.8.0-windows.zip)
into "C:\Program Files\qemu-0.7.2-windows" and
"C:\Program Files\qemu-0.8.0-windows".

Now, why do I tell you to get two versions of the program? Simple:
As of this writting, the latest version of QEMU was 0.8.0, and I couldn't find
a binary distribution with TAP available. There was a 0.7.2 binary with TAP,
but it had some bug while mounting virtual FAT images (every time I tried to
mount one, it showed an "assert: /OS2_Util/Archiv 4 < 6" for
each and every directory, and then it won't load)! Depending on the
path to mount, the program crashed. So, to make things easy, simply install
these two versions. You can always use version 0.7.2 and switch to 0.8.0
when you need it, or vice-versa. If you don't want to use the network
support, just stick to version 0.8.0.

-L . ...............: BIOS location
-m 128 ...............: set virtual RAM size to 128 MB
-localtime............: set time clock to local time
-boot a...............: boot on floppy
-fda OS2W4-install.img: use given file as floppy disk 0 image
-cdrom OS2W4_CD.qcow..: use given file as CD-ROM image
-hda OS2W4_HD_2G.qcow.: use given file as hard disk 0 image

If you are fast enough, anytime you boot OS/2 (during installation or not),
you can type "Alt+F1" for options or "Alt+F2" to see the drivers as they are
being loaded - but you must do this while there's the "OS/2" message on the
upper left part of the screen (it appears for less than one second on my
machine, on this step).

TIPS:

On the next steps, you'll need to change/remove virtual disk
images using the QEMU console. On the version I used, if you type the name of
an image that doesn't exist, the program won't give you any error or warning
message! So, if the emulation seems to hang and there's no sign of progress,
it might be because of a typo! Use the command info block to see
the block devices.

A normal OS/2 boot with QEMU takes about 1 minute on my machine. Most of
the time (about 30s) is spent loading IBM1S506.ADD. Sometimes QEMU seems to
hang during boot while loading a module. I suggest you to monitor this by
always typing Alt+F2 before the boot, and if you see QEMU spending
too much time loading a module, just quit and try again.

You'll see the installation screen, asking to
"Insert the OS/2 Diskette 1 into drive A". Now, go to the console
(press Ctrl+Alt+2), and switch the disk with:

change fda OS2W4-disk1.img

Press Ctrl+Alt+1 to continue. You'll see the OS/2 startup screen:

Wait for a while (took about a minute here) until you see the message
"Insert the OS/2 Diskette 2 into drive A.". Go back to the console
(Ctrl+Alt+2), and switch the disk with:

change fda OS2W4-disk2.img

Again, Ctrl+Alt+1 to go back. On the "Welcome" screen, press ENTER.
Then you can choose "1. Easy Installation" or "2. Advanced Installation".
Select "Advanced Installation" (so we can create a HPFS partition).

Of course, for sound support, change the "Multimidia Device Suport"
from "None" to "Sound Blaster 16".

Click NEXT. On the next screen, leave all options as the default
(when I tried all with "No Support Installed", the installation
wasn't complete).
Click NEXT once again.

On "Select System Default Printer", set "Do not install default printer".
Click OK.

On "OS/2 Setup and Installation", select the features you want to install
and click Next.

On "Advanced Options", deselect all and click OK.

On "OS/2 Warp Setup and Installation", select "TCP/IP Services"
and click Next. If QEMU was perfect, perhaps there would be no
crash at this point... :-) If it crashed on you too, select
"End program/command/operation" and click OK to continue anyway.

Because of the crash, some dialogs were garbled, but
the installation went on just the same.

At the end, you can click OK and wait until the system restart to
continue the installation. I'm not sure if it will ever continue,
as I clicked Cancel and did a normal shutdown from the Desktop
(right-click the desktop and select "Shut down...").

If you quit QEMU on the last step, load it once again. Your OS/2 must
be installed and running fine!

If you want to install the network support now, I suggest you to
quit QEMU, backup your HD image and start it again, but now with
the NIC drivers available:

Click Next. On "Change Adapter", click "Other adapter..." and inform
the location of the driver (d:\rtl8029), then click OK. When it finds the
driver, select Ethernet and click OK. It will copy the files, then click OK.

If/when asked, tell the program to replace any existing files
(even with new date/versions). At the end, quit and
reload QEMU to complete the remaining steps (update of locked
files), and you got yourself an updated system!

To save some HD space, you can "commit" the FixPack and delete C:\ARCHIVE.
Edit the response file, comment all lines beggining with ":", uncomment the
lines for commiting the FixPack and run fservice again, with the same parameters.
Now remove
c:\temp\fp15 from OS/2 and c:\OS2_util from Windows.

Copy the FixPack files to the virtual HD into
c:\temp\sdd. Open a console ("OS/2 Window") and type:

c:
cd c:\temp\sdd
set lang=en_US
setup gen

After installation, you'll be asked to shutdown, so do it: quit QEMU
and reload it. Now you can change color depth and resolution through
"OS/2 System", "System Setup", "System", then "Screen" tab (check out
screenshot #3).

You can now remove c:\temp\sdd from OS/2 and c:\OS2_util from Windows.